Mesne Profits

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CHAPTER –1

Introduction to the Topic

The law of nature gives the primary right to compensation against the breach of legal right. Likewise, wrongful interference with the immovable property of another is a legal wrong and law of nature gives primary right to damages or compensation for such legal wrong.

The term ‘mesne profits’ relates to the damages or compensation recoverable from a person who has been in wrongful possession of immovable property. The Mesne profits are nothing but a compensation that a person in the unlawful possession of others property has to pay for such wrongful occupation to the owner of the property.[1] It is settled principle of law that wrongful possession is the very essence of a claim for mesne profits and the very foundation of the unlawful possessor’s liability therefore. As a rule, therefore, liability to pay mesne profits goes with actual possession of the land. That is to say, generally, the person in wrongful possession and enjoyment of the immovable property is liable for mesne profits.

Before comprehending the concept and relevant provision of mesne profits in the Code of Civil Procedure, 1908, it would be appropriate to discuss & understand the concept of ownership and possession in nutshell.

1.1 Ownership & Possession

The concept of ownership is one of the fundamental juristic concepts common to all system of law. Ownership consists of an innumerable number of claims, liberties, powers & immunities with regard to the things owned. According to some jurists there is no point in having the concept of ownership without these claims.

The idea of ownership developed slowly with the growth of civilization. So long as the people were wondering from place to place and had no settled place of residence they had no sense of ownership. The idea began to grow when they started planting trees, cultivating land, building their homes. The transition from a pastoral to an agricultural economy held the development of the idea of ownership. People began to think in terms of ‘mine & thine’.

The concept of ownership is easy to understand but difficult to define with exactitude. The Jurists have defined the ownership in different ways.

· According to Austin “ownership means a right which avails against everyone who is subject to the law conferring right to put thing to user of infinite nature”.[2]

· According to Hibbert “ownership involves four rights and those are the rights of using the thing, excluding others from using it, the disposal of thing and the destruction of thing.[3]

· In Blacks Law Dictionary, ownership has been defined as “collection of rights of rights to use & enjoy property, including the right to transmit it to others”.

From the analysis of aforementioned definitions one can conclude that the ownership is nothing but a right, which is available against every one who is subject to law. Such claim consists of following rights.

1. Right to posses & use,

2. Right to exclude others from possessing & using it,

3. Right to transmit, and;

4. Right to destroy thing owned.

Therefore ownership comprises of a number of rights, and among these rights one of the most significant right is possession of property. Possession is prima facie evidence of ownership and law always protect right to possession. According Savigny protection of possession is a branch of protection to person and as any act of violence to person is unlawful, so is the act that disturbs possession by fraud or force. He further stated that possession is not protected because it is so intimately connected to the ownership, but in the interest of public order and safety. If the law allows self-help it would certainly lead to breach of peace. Therefore in the interest of public order and safety no one should be allowed to take the laws into his own hands[4]. According to Windschids protection to possession stands on the same ground as protection against injuria i.e. violation of private legal right.[5]Possession is well protected as a part of criminal law with the objective to preserve & maintain peace. Possession is also protected as a part of law of tort.

In the property law, Possession is considered as a sufficient proof of ownership. Every person may keep what he possesses unless some one can prove that he has better title. And the moment some one can prove the better title against the person who was in prior possession, he is entitled to compensation against the unlawful possessor of property. Mesne profits are one such mode of compensation that can be claimed against a person in unlawful possession. Mesne profits are in the nature of damages for being deprived of the benefit, which the person in possession derives from the property.

1.2 Origin of the Concept of Mesne profits

The concept of mesne profits has its origin in the medieval period. Under the feudal system, the King owned all land. The King would let out a part of these lands to his barons on the condition that they will provide him with soldiers whenever he wanted to raise an army.

Soon this turned into a nice way of raising money by charging rent for the land. In turn, the barons would let out part of the land to tenant farmers and they would pay rent – usually in kind, by providing livestock or crops – for the privilege of being able to keep some of the produce for themselves. Thus the concept of chains of tenancies was born.

The person to whom they paid rent became known as the ‘mesne landlord’. The word meant ‘intermediate’ in old French. The phrase was originally ‘mesne rents and profits’ meaning all the rent or profit from the land that could be extracted by the intermediate landlord. In the modern time the term ‘mesne profits’ means the claim that a lawful owner of the property has against the unlawful possessor of the property.

1.3 NATURE OF Mesne Profits

All the legal system, which governs the civilized nations of the world agree upon the basic principal of natural justice to obtain reparation for wrongs or infringement of legal rights.[6] In other words, the law of nature gives primary right to a compensation for injuries. Mesne profit is one such right to compensation granted against injuria i.e. breach of legal right. Mesne profit is a positive right available against infringement of private legal right.

The main object of awarding mesne profit is to compensate the actual owner of the property for all the loss he has suffered. In other words the object of awarding a decree of mesne profits is to compensate the person who has been kept out of possession and deprived of enjoyment of his property even though he was entitled to possession of property, and the word compensation would embrace in its purview any actual loss suffered by a lawful owner. The idea of granting mesne profits as compensation normally connotes reparation for some past wrongful act i.e. unlawful possession.

1.4 Scope of study on Mesne profits

Mesne profits are form of the compensation available for the breach of legitimate civil right of lawful owner of the property. Therefore it should be noted that mesne profits can be claimed exclusively for the breach of legitimate civil right. Furthermore, Mesne profits can only be claimed against the wrongful possession of the immovable property. Mesne profits cannot be granted in respect of wrongful possession of movable property. In K. B. Singh v. M. D. U. Co-Operative Association Ltd.[7], Hon’ble Court observed that the definition of ‘mesne profits’ makes it clear that the mesne profits can be claimed regarding immovable property and not with regard to movable property.

The researcher has, therefore, confined the scope of this research project to breach of legitimate civil rights due to unlawful possession of property and compensation thereof.

1.5 Objective of the study

The first and foremost objective for carrying out this project is to understand the concept of Mesne profit. Besides, the researcher also aims to study the relevant provision Mesne profits in the Code of Civil Procedure, 1908. In addition to this, the researcher will empathize the mode of assessment of mesne profits and the grounds on the basis of which mesne profits are to be assessed.

1.6 Hypothesis

· I assume that there is a uniform criterion for assessment of mesne profits.

· I assume that wrongful possession form the basis of the claim of mesne profits.

· I assume that mesne profits can be granted even though it is not specifically claimed in the plaint under Order 20 Rule 12.

1.7 Research methodology

The present research study is mainly a doctrinal and analytical. Taking this into consideration, the researcher have relied on the conventional method of using libraries consisting of primary sources like Judgment of the Hon’ble Supreme Court and Hon’ble High courts published in various Law Journals.

The study being critical in nature, the researcher has adopted doctrinal methods for the purpose of research because it is not possible to study the subject by experimental method.

The relevant material is also collected from the secondary sources. Materials and information are collected from legal sources like books on Code of Civil Procedure, 1908 by eminent authors like Mulla, C. K. Takwani and many more of them. The researcher has also referred Journals like AIR Journal, Indian Law Journal, Gujarat Law Herald, Indian Bar Review etc. for the collection of appropriate material on the topic. Material is also collected from print & electronic media like www.indlaw.com, www.manupatra.co.in,www.judis.nic.in etc.

From the collected material and information, researcher proposes to critically analyze the topic of the study and tries to reach the core aspects of the study.

CHAPTER –2

Legal provision related to Mesne Profits

Mesne profits may be defined as the profits or other pecuniary benefits, which one who disposes the true owner receives between disseizin and the restoration of possession.[8] Therefore mesne profits corresponds to the profits which the person in wrongful possession is receiving or might receive with due diligence for the wrongful occupation of property. Mesne profits are defined under Section 2(12) if Code of Civil Procedure.

Section 2 (12) of the Code of Civil Procedure provides that: “Mesne profits” of property means those profits which the person in wrongful possession of such property actually received or might with the ordinary diligence have received therefrom, together with interest on such profits but shall not include profits due to improvement made by the person in wrongful possession.

From the analysis of the above stated definition on can conclude that “Mesne profits” are the profits, which the person in unlawful possession actually earned or might have earned with the ordinary diligence. According to Section 2(12) a person becomes entitled to mesne profits only when he has right to obtain possession but another person whose occupation is unauthorized keeps him deprived of that possession. The first and foremost condition for awarding mesne profits is unlawful possession of the occupant of the property. The section further provides that Mesne profits also include interest on such profits. However it explicitly excludes any profit earned due to improvement in the property made by the person in unlawful possession of such property.

In Phiraya Lal alias Piara lal v. Jia Rani[9] Hon’ble Delhi high Court while defining the term mesne profits observed that, “when damages are claimed in respect of wrongful occupation of immovable property on the basis of the loss caused by the wrongful possession of the trespasser to the person entitled to the possession of the immovable property, these damages are called mesne profits”.

In Nataraja Achari v. Balambal Ammal[10], taking into consideration the definition of mesne profits provided under Section 2(12) Hon’ble Madras High Court observed that there are three different types of cases in which question of rights of profits arise:

1. Suit for ejectment or recovery of possession of immovable property from a person in possession without title, together with a claim for past or past and future mesne profits.

2. A suit for partition by one or more tenants in common against others with a claim for account of past or past and future profits.

3. Suits for partition by a member of joint Hindu family with a claim for an account from the manager.

The Court observed, “In the first case, the possession of the defendant not being lawful, the plaintiff is entitled to recover mesne profits such profits being really in the nature of damages. In second case the possession and receipt of profits by the defendant not being wrongful the plaintiffs remedy is to have an account of such profits making all jus allowance in the favour of the collecting tenant in common. In the third case the plaintiff must take the joint family property as it exists at the date of the demand for partition and is not entitled to open up past account or claim relief on the ground of past inequality of enjoyment of the profit, except where the manager has been guilty of fraudulent conduct or misappropriation. The plaintiff would however, be in the position of the tenant in common from the date of severance in status and his right would have to be worked out on that basis.

2.1 Interest on Mesne profits

The definition of the term ‘Mesne profit’ provided under section 2(12) of the Code of civil Procedure, 1908 explicitly provides that interest is an integral part of mesne profits. From the expression ‘together with interest on such profits’ in Section 2(12) it is apparent that ‘mesne profit’ includes within its fold an interest component. And the rate of interest to be allowed in regard to mesne profits varies depending upon the facts and circumstances of each case. Since the statute does not fix any rate of interest it is left at the discretion of court to determine the rate of interest. Generally, the rate of interest is awarded at 6 % per annum.

Very early in the year 1922, in Lata Prasad v. Sri Ganeshji[11] Hon’ble Allahabad High Court, held that the term ‘Mesne profits’ also includes interest on the profits earned by the unlawful possessor of the property and where the decree of granting mesne profits say nothing about interest, the decree holder can claim that the decree of mesne profits includes interest.

In N. Dasjee v. Tirupathi Devasthanam[12], Hon’ble Supreme Court observed that, “Under Section 2(12) of the Civil Procedure Code which contains the definition of mesne profits, interest is an integral part of mesne profits and has, therefore, to be allowed in the computation of mesne profits itself. That proceeds on the theory that the person in wrongful possession appropriating income from the property himself gets the benefit of the interest on such income”.

In Tarquino Raul Henriques v. Damodar Mangalji and Co. Pvt. Ltd.[13], the question directly came up for the consideration before the Hon’ble Bombay High Court. In this case appellate filed review application against the order of the Hon’ble Court. The impugned order granted mesne profits but it was silent interest as far as interest on such profits was concerned. It was, therefore, urged by the appellate that the interest being an integral part of the mesne profits it was implicit in the order. On the other hand defendants contended that grant of interest is discretionary and once the impugned order is silent on the point of interest it is safe to assume that the interest was negatived. The issue was whether the grant of interest is implicit when an order for mesne profits is directed S. 2(12) of Code of Civil Procedure. Having considered the observations of the Supreme Court in N. Dasjee v. Tirupathi Devasthanam and the definition of the term ‘Mesne profits’ under Section 2(12) the court held that the expression "together with interest on such profit" clearly indicates that the mesne profits would not only include the actual damage suffered as a result of wrongful possession, but also the interest accrued thereon and in that sense the mesne profits would always comprise both the damage and the interest. And the grant of interest is implicit in the mesne profits.

2.2 Improvements in the property by unlawful possessor

Latter part of Section 2(12) expressly provides that mesne profits do not include profits due to improvement made in the property by the person in wrongful possession.

In The Hindustan Petroleum Corporation Ltd., Chairman and Managing Director v. Khwaja Asadullah Baig and Ors[14], while assessing the quantum of mesne profits Hon’ble Andhra Pradesh High Court held that, taking into consideration concept of mesne profits under Section 2(12), the courts have to exclude the profit attributable to the improvements made on the property.

However a person in wrongful possession of the property is not entitled to claim expenses incurred on improvements in such property. In other words, plaintiff in not bound to pay the defendant compensation for improvements as a condition precedent to obtaining possession. The defendant being in the rank of trespasser is not entitled to such compensation.[15]

2.4 Assessment of theMesne profits.

One broad principle governing the liability for mesne profits is evident from Section 2(12) of the Code of Civil Procedure, 1908 which defines ‘mesne profits' to mean "those profits which the person in wrongful possession of property actually received or might with ordinary diligence have received therefrom together with interest on such profits, but shall not include profits due to improvements made by the person in wrongful possession". But the Section does not provide any fixed rule for the assessment of such profit. The provision simply states that mesne profits include interest on such profits. And profits due to improvement are excluded from the assessment of the quantum of mesne profits.

In the lights of this broad principle, the determination of quantum mesne profits is left at the discretion of the court. And mesne profits being in the nature of damages even the Court cannot lay down any invariable rule governing award and assessment of mesne profits in every case. The Court may mould award and assessment of mesne profits according to the justice of the case. In other words there is no uniform criterion for the assessment of mesne profits. The quantum of mesne profits depends upon the facts and surrounding circumstances of each case.

Earlier the rental value of the property formed the basis of assessment of mesne profits. The courts used to award mesne profits taking into consideration rental value of the property. This practice of assessing mesne profits on the basis of rent was inappropriate and later on the Courts rightly struck it down.

In Kesardeo Baijnath Vs. Nathmal Kisanalal[16], it was held, “that determination of mesne profits on the basis of rental value of the property would be in correct test in the context of the definition of menses of profits in section 2[12] Rent could be relevant factor, for considering the quantum of mesne profits but not a decisive of the matter”.

In Dr. J K Bhakthavasala Rao v. Industrial Engineers, Nellore[17], Hon’ble Andhra Pradesh High Court observed that, “fixing the damages for the use and occupation of the suit building by its very nature, involves adjudication of a pure question of fact and there exists hardly any uniform and standard pattern of assessment in this regard. The court should take into consideration comparative assessment of the nature, location etc of the suit premises vis-à-vis similar characteristics of premises in the surrounding area. It is, however, very difficult to find the premises of similar nature, size and quality of at the same location. Even if there exists any broad similarity in this aspect, the rent in respect of such premises would depend, mostly, upon the need of lessee and the circumstances under which the leases are granted. Prevalence of amity or enmity, as the case may be, between the landlords and the tenants and the duration of lease are certain factors, which would have bearing of this. And therefore the mesne profits cannot be determined solely on the basis of rental value of the land”.

While assessing the quantum of mesne profits, the factors such as location of the property, comparative value of the property, condition of property in question, profits that are actually gained or might have been gained from the reasonable use such property are generally taken into consideration by the courts. Moreover it is settled principle of law that the criteria for the calculation of mesne profits is not what the owner loses by the deprivation of possession but profits should be calculated on the basis of what the person in wrongful possession namely, the defendants had actually received or might with ordinary diligence have received therefrom.

Moreover, the law of equity requires that mesne profits should be the net profits i.e. the profits derived after making deduction toward necessary expenditure for earning such profits. Therefore all such payment made by the person in wrongful possession, as the plaintiff would have been bound to make if he had been in possession, should be deducted from the gross earnings. These expenses include, expenses incurred for maintenance of property, cess paid on the property etc, depending upon the nature of the property. For instance in case of agricultural land cost of cultivation, seasonal fluctuation etc should be deducted.

Like wise the court should also deduct the profits made by unlawful possessor through improvement in the property. It would be unjust on the part of court to award mesne profits without deducting these expenses.

In short with regard to the assessment of mesne profits, we can say that there in no uniform criteria for the assessment of mesne profits. The quantum of mesne profits depends upon the facts and circumstances of the case and courts can mould it according to the justice of the case. In the early stages the rent formed the basis of assessment of mesne profits. But with the passage of time the courts struck down the practice of assessing mesne profits on the basis of rental value of the property. Today, there are various factors that are taken into consideration while assessing the quantum of mesne profits as discussed earlier. Moreover, the profits should be ascertained on the basis of what the wrongful possessor of the property earned or might have earned with the due diligence and not on the basis of what the plaintiff have lost. And the expenses incurred by the wrongful possessor of the property, for the maintenance of the property, must be deducted from such profits.

2.5 Burden of Proof

It is settled principle of law that in case of mesne profits the burden of proof rests on the claimant i.e. the plaintiff. And mesne profits being in the form of compensation, before claiming mesne profits the plaintiff have to establish before the Hon’ble court that he was lawful owner of the property and he was deprived of it by the unlawful possession of the defendant. The plaintiff having proved the aforementioned facts becomes entitled to mesne profits. Further the onus of proving what profits he might have received with the ordinary diligence lies on the claimant.

In the case of Ramakka v. Nagesam[18], Hon’ble Madras High Court while considering thee question of onus of proof in case of mesne profits held that “onus of proving what profits might, with due diligence, have been received in any year lies upon the party claiming mesne profits”. The court further observed that, “Plaintiff may also adduce evidence to prove that the occupant was not diligent and might have got greater profits by proper diligence”.

Facts: In this case the only issue with regard to mesne profits was whether the defendant is liable to pay mesne profits for the land that remained under attachment under the provisions of Section 146, Code of Criminal Procedure. It was contended by the defendant that they cannot be said to be in unlawful possession of property while the land in dispute was under attachment and therefore they are not entitled to mesne profits for that period of time.

Judgment: Taking into consideration the definition of mesne profits under Section 2(12) of Code of Civil Procedure Hon’ble Court held that, “Wrongful possession by the defendant is the very essence of a claim for mesne profits, and the very foundation of a decree therefor. Applying these principle it is impossible to hold by any stretch of imagination, that during the time that the land remained under attachment by the operation of the order under Section 146, Code of Criminal Procedure and this Court was in custody of it on behalf of the rightful owners, that is to say of the plaintiffs in the present case, that the defendants were in possession of the lands. The defendant, therefore not being in the unlawful possession of the property, is not liable to pay mesne profits for the land that remained under attachment under the provisions of Section 146, Code of Criminal Procedure

Facts: The leasehold rights in certain land together with the building were sold to Lala Balkishan Das (Hereinafter be referred to as 'the plaintiff') by a sale deed. By an agreement dated 21st March 1949 the plaintiff contracted to sell his rights in the land and the building to Seth Fateh Chand (Hereinafter called 'the defendant') It was recited in the agreement that the plaintiff agreed to sell the building for Rs.112500, and that Rs.1000 were paid to him as earnest money at the time of the execution of the agreement.

On 25th March 1949 the plaintiff received Rs.24000 and delivered possession of the building and the land in his occupation to the defendant, but the sale of the property was not completed before the expiry of the period stipulated in the agreement. Each party blamed the other for failing to complete the sale according to the terms of the agreement. Alleging that the agreement was rescinded because the defendant had committed default in performing the agreement and the sum of Rs.25000 paid by the defendant stood forfeited, the plaintiff in an action filed in the Court of the Subordinate Judge, Delhi, claimed a decree for possession of the land and building and a decree for Rs.6500 as compensation for use and occupation of the building from 25thMarch 1949 to 24th January 1950 and for an order directing enquiry as to compensation for use and occupation of the land and building from the date of the institution of the suit until delivery of possession to the plaintiff.

The trial Judge held that the plaintiff had failed to put the defendant in possession of the land agreed to be sold and could not therefore retain Rs.25000 received by him under the contract. Accordingly trial Judge directed that the plaintiff on depositing Rs.25000 less Rs.1400 (being the amount of mesne profits prior to the date of the suit) the defendant do put the plaintiff in possession of the land and the building, and awarded to the plaintiff future mesne profits at the rate of Rs.140 per mensem from the date of the suit until delivery of possession or until expiration of three years from the date of the decree whichever event first occurred. In appeal the High Court of Punjab modified the decree passed by the trial Court and declared that the plaintiff was entitled to retain out of Rs.25000 paid by the defendant under the sale agreement, a sum of Rs.11250" being compensation for loss suffered by him and directed that the plaintiff do get from the defendant compensation for use and occupation at the rate of Rs. 265 per mensem.

Judgment: With regard to the issue related to assessment of quantum of mesne profits, Hon’ble Supreme Court held that, “The plaintiff is undoubtedly entitled to mesne profits from the defendant and 'mesne profits' as defined in Section 2(12) of the Code of Civil Procedure are profits which the person in wrongful possession of property actually received or might with ordinary diligence have received therefrom, together with interest on such profits, but do not include profits due to improvements made by the person in wrongful possession. The normal measure of mesne profits is therefore the value of the user of land to the person in wrongful possession. The assessment made by the High Court of compensation at the rate of five per cent of what they regarded as the fair value of the property is based not on the value of the user, but on an estimated return on the value of the property. Therefore the same cannot be sustained. It was, therefore, directed that mesne profits should be computed at the rate of Rs.140 per mensem from 1st June1949 till the date on which possession was delivered to the plaintiff (such period not exceeding three years from the date of decree) together with interest at the rate of six percent on the amount accruing due month after month”

Facts: These two cross appeals arise from a suit filed by Chandramaul (hereinafter called the plaintiff) against Bhagwati Prasad (hereinafter called the defendant) in the Court of Second Civil Judge, Kanpur. The plaintiff alleged that he was the owner of house and that he had let out the said house to the defendant as his tenant on a monthly rent of Rs. 450 per month. The defendant continued to pay this rent and was not in arrears in that behalf as on the 31st March 1954. Thereafter, he failed to pay the rent, and so, the plaintiff terminated his tenancy and brought the suit on the 30th November 1955 claiming ejectment against the defendant and a decree for Rs. 8550 as arrears of rent from the 1st April 1954 to the end of October 1955. Future mesne profits were also claimed. The learned trial Judge held that the suit was competent and came to the conclusion that the plaintiff was entitled to a decree for ejectment as well as for rent. In regard to the amount of rent, however, the learned trial Judge did not accept the plaintiff's version and considered the question on the merits. He held that Rs. 300 p.m. would be a reasonable rent for the premises in question and passed a decree for Rs. 5,700 in favour of the plaintiff as arrears of rent. The decree further directed the defendant to pay damages by way of use and occupation at the rate of Rs. 300 p.m. till the date of ejectment. Against this decree the defendant preferred an appeal before the Allahabad High Court. The High Court has agreed with the trial Court & confirmed the decree for ejectment passed by the trial Court.

The High Court, however, set aside the said decree insofar as it directed the defendant to pay past rent at the rate of Rs. 300 p.m. In that connection, the High Court has referred to the provision of U.P. (Temporary) Control of Rent and Eviction Act (No. III) Of 1947 and held that the material provisions of this Act require that no premises could be let out by the land-lord without the permission of the District Magistrate or other appropriate authorities mentioned in that behalf. Thus, the tenancy not having been proved it would be inappropriate to allow any rent to the plaintiff at all. Therefore the High Court rejected the plaintiff's case for rent or for mesne profits. Against this decree the plaintiff and the defendant filed appeals before Hon’ble Supreme Court with a certificate granted to them by the High Court in that behalf.

Issues:

1. The defendant objected the decree for ejectment.

2. Whereas the plaintiff objected rejection of his claim for the past rent and future mesne profits.

Judgment: Hon’ble Supreme Court while confirming the decree passed by the High Court dismissed the appeal preferred by the defendant and observed, “plaintiff was entitled to possession of the said land”.

In regard to the plaintiff's claim for past rent and future mesne profits Hon’ble Supreme observed that, “We see no reason to interfere with the decree passed by the High Court. But we do not see how the High Court's decree in relation to future mesne profits can be sustained. Because, once it is held that the plaintiff is entitled to eject the defendant, it follows that the from the date of the decree granting the relief of ejectment to the plaintiff, the defendant who remains in possession of the property despite the decree, must pay mesne profits or damages for use and occupation of the said property until it is delivered to the plaintiff. A decree for ejectment in such a case must be accompanied by a direction for payment of the future mesne profits or damages. And therefore the plaintiff is entitled to future mesne profits at the rate of Rs. 300 per month.

Facts: In this case M/s Banwari Lal & Sons (respondent) were the owner of the property situated at New Delhi. On 13/3/1959, Delhi Administration under the Requisition and Acquisition of Immoveable Property Act, 1952, requisitioned said property. Before the said Act lapsed on 10.3.1987, a notification under Section 4 of the Land Acquisition Act was issued on 6.3.1987 for acquisition of the entire properly. The said notification was set aside by the High Court by a judgment-dated 04/02/1991 on a writ filed by the Respondent. High Court also appointed arbitrator to determine the damages w.e.f 10/3/1987, payable by Delhi Administration to the respondent in respect of the property. The appellate took SLP the said judgment but the same was dismissed by Hon’ble Court vide order dated 21/3/1991. Appellant was, however, allowed time to vacate the property by 31/3/1993. Thought the appellate were allowed time to vacate the premises by 31/3/1993 the arbitrator the arbitrator calculated damages from 10/3/1987, to which the appellant filed objections. The learned single Judge dismissed the said objections. Being aggrieved, the appellant appealed to the division bench of the High Court. By the impugned judgment the High Court dismissed the appeal. Against that judgment, the appellant has filed this appeal by way of special leave.

Issues:

1. Whether the use and occupation of the property by the appellant after 10/3/1987 was wrongful and illegal and in the nature of trespass even after they were allowed time to vacate the premises till 31/3/1993 by the Hon’ble Supreme Court; and

2. Whether the respondent was entitled to mesne profits?

Judgment: Hon’ble Supreme Court held that, “In view of the permission granted by this Court enabling the appellant to use and occupy the property up to 31/3/1993, it cannot be said that the possession of the appellant was illegal and wrongful and in the nature of trespass. In the circumstances, damages were claimable not on the basis of mesne profits but on the basis of fair rent the arbitrator has assessed damages on the assumption that after 10/3/1987, the occupation and possession of the property was wrongful and illegal and in the nature of trespass. Accordingly, the arbitrator has assessed damages on the footing that the respondent was entitled to mesne profits. This assumption was wrong as the appellant was given time by this Court to remain in possession up to 31.3.1993.” The court further observed that, “right to mesne profits presupposes a wrong whereas a right to rent proceeds on the basis that there is a contract. But there is an intermediate class of cases in which the possession though not wrongful in the beginning assumes a wrongful character when it is unauthorized retained and in such cases, the owner is not entitled to claim mesne profits but only the fair rent”.

Facts: The only issue before the Hon’ble Supreme Court was whether mesne profits can be granted when the plaintiff had not specifically prayed for an inquiry relating to mesne profits in terms of Order XX Rule 12, Code of Civil Procedure, 1908. The learned Solicitor General appearing on behalf of plaintiffs contended that there was no demand for mesne profits as such but the claim for mesne profits would be included within the expression "awarding possession and occupation of the property aforesaid together with all the rights appertaining thereto."

Issue: Whether mesne profits can be granted when the plaintiff had not specifically prayed for an inquiry relating to mesne profits in terms of Order XX Rule 12, Code of Civil Procedure, 1908.

Judgment: Hon’ble Supreme Court held that, “The claim for mesne profits cannot be included within the expression referred by learned counsel on behalf of plaintiff and the High Court was in error in awarding to the plaintiff’s mesne profits though they had not been claimed in the plaint. The provision in regard to the mesne profits will therefore have to be deleted from the decree.

Facts: The plaintiff-respondents filed a suit for partition and allotment of separate half share in the property. The suit was decreed. The plaintiff-respondents put the decree in execution. The decree-holders filed an application before the executing court under Order 20, Rule 12, Code of Civil Procedure for enquiry into the future mesne profits. The appellants, who are the judgment-debtors, objected this. The application of the decree-holder was allowed by overruling the objection raised by the appellants herein. The judgment-debtor-appellants thereafter filed a revision before the High Court, which was also dismissed. It is against the said judgment of the High Court; the appellants have preferred this appeal.

Issue: Whether executing court can direct inquiry into the future mesne profits under Order 20, Rule 12 of Code of Civil Procedure?

Judgment: Hon’ble Supreme Court observed that, “Perusal of record shows that the decree-holder in their plaint did not pray for the grant of any future mesne profits. It is also manifest from the decree passed by the trial court that the court did not grant either past or future mesne profits to the decree-holder. Further, the decree-holder did not move any application either for amendment of the plaint by incorporating prayer for grant of future mesne profits or amendment of the decree for grant of future mesne profits. Moreover, it is true that in the absence of any prayer in the plaint, it is open to the court to grant past mesne profits. So far the future mesne profits is concerned, the court has a discretionary power to pass a decree directing the enquiry into the future mesne profits and the court may grant such mesne profits, although it is not specifically asked for in the plaint. In the present case, the court has not exercised its discretion to grant future mesne profits. In the absence of such an order or direction, it was not open to the executing court to direct the enquiry for ascertaining the future mesne profits under Order 20, Rule 12, Code of Civil Procedure.

In this case Hon’ble Supreme Court had laid down that when the plaintiff had not prayed for an inquiry relating to mesne profits in terms of Order 20 Rule 12, Code of civil procedure, 1908, then in the absence of such prayer same could not be granted.

CHAPTER – 4

Conclusion

Legal rights and remedies for the breach of legal rights are two sides of the same coin. Stated simply legal rights and remedies for the breach of these rights have always coexisted. It is provided in the famous maxim ubi jus ibi remedium, which literally means where there is right there is remedy. Accordingly unlawful interference with the immovable property of another person amounts to breach of a legal right; and there is remedy in the form of mesne profits for wrongful interference with the property.

Section 2(12) of the Code of Civil Procedure provides for mesne profits. According to Section 2(12) the term mesne profits relates to the ‘the damages or compensation recoverable from a person who has been in wrongful possession of immovable property. The term mesne profits, under Section 2(12) of Code of Civil Procedure, also include within its ambit interest on such profits, but it does not include profits made due to improvement in the immovable property. Plethora of judgment signifies that the wrongful possession of the defendant is the very essence of the claim of mesne profits. And the moment the plaintiff is successful in establishing the wrongful possession of the other person he is entitled to claim mesne profits. Therefore our first assumption that the wrongful possession of the defendant forms the basis of the claim of mesne profits stands true.

Mesne profits being in the nature of compensation, the enactment rightly does not lay down any uniform standard for the assessment of mesne profits. Section 2(12) merely lays a broad principle for the assessment of mesne profits [i.e. Mesne profits =Profits made from the unlawful possession of the property + Interest on such profits – Profits made due to improvement in the property]. And the assessment of the quantum of mesne profits is rightly left at the discretionary power of the court depending on the facts and circumstances of each case. The courts are required to into consideration various factor while determining the quantum of mesne profits and thereby use their power judiciously. Therefore our second hypothesis that the there is a uniform criterion for the assessment of mesne profits is inaccurate.

Lastly, from the analysis of numerous judgment of Hon’ble Supreme Court we can conclude that the third hypothesis that mesne profits can be granted even if they are not specifically claimed in the plaint under Order 20 Rule 12 of Code of Civil procedure does not stands true. Though, there has been difference of opinion with regard to this issue but in the most recent judgment on this issue Hon’ble Supreme Court had held that in mesne profits cannot be awarded in such cases.

Suggestions

· The definition of the term ‘mesne profits’ under section 2(12) should be defined more accurately. The term mesne profit is defined as those profits which the person in wrongful possession of the actually received or might with the ordinary diligence have received therefrom. This definition merely provides that profits earned by unlawful possession means mesne profits but it fails to provide the circumstances under which it can be granted. Therefore it is required to redefine mesne profits.

· Secondly, the maximum rate of interest & minimum rate of interest to be allowed on such profits should be fixed in the enactment. Generally it is allowed at the rate of 6% per annum, but it should be explicitly provided in the enactment.

· It is true that mesne profits being in the nature of compensation, uniform criteria for the assessment of mesne profits cannot be laid down. And the assessment of mesne profit should be left at the discretion of the court. But the factors on the basis of which the assessment can be made must be laid down in the code.